Intel is recalling a support chip for the highly-touted new “Sandy Bridge” processors in a move that should have little technological impact but a significant financial effect on the company.
Intel officials announced on 31 January that a design flaw found on its 6-Series chipset — dubbed “Cougar Point” — is forcing them to recall the support chip, a move that could cost the giant chip maker upwards of $1 billion in lost revenues and repair and replacement expenses.
It also could mean a reduction in sales this quarter of the number of systems featuring the new Sandy Bridge processors, and gives rival Advanced Micro Devices some momentum in the competition for the growing SoC (system-on-a-chip) market. It also gave AMD a quick stock boost soon after the announcement came from Intel, which saw trading on its stock briefly halted.
They also stressed that the problems with the chip set have no impact on the Sandy Bridge processors themselves.
“It doesn’t change any aspect of Sandy Bridge,” Intel Chief Financial Officer Stacy Smith said.
The design flaw revolves around the SATA (Serial-ATA) ports within the chipset, according to Intel. Because of the error, some of the SATA ports could degrade over time to the point that it would effect the operation of a computer’s hard disk drive or DVD drives. Intel is fixing the flaw by changing a metal layer in the chipset.
Stacy Smith and Steve Smith, vice president and director of Intel’s PC Client Operations business, said during the conference call that the chipset initially passed Intel’s internal testing, and then qualification tests with PC makers. The tests put the chipsets through the paces under conditions involving temperature, electrical voltage and time.
Intel had shipped about 100,000 of the chipsets, and began hearing complaints about a few of them, Intel executives said. Last week, Intel tested the chipsets again and began finding problems in a few of them. Over the course of the next few days, Intel gathered a team of engineers to find the problem and devise a fix for it. On the night of Jan. 30, Intel decided to stop shipment of the chipsets and send out new ones later in the quarter, Stacy Smith said.
Intel began talking to OEMs about the issue on 31 January and devising strategies for handling consumer concerns, he said. Both officials said the problem will mean that a older Intel products will make up a larger mix of overall first-quarter sales than anticipated. However, they didn’t expect many problems among end users — a relatively small number of PCs sporting the second-generation Core-i chips have reached consumers, and the chipset design flaw primarily impacts systems powered by the quad-core Core i5 and i7 chips, they said.
Overall, Steve Smith said the problem could hit between 5 and 15 percent of the chipsets, depending on usage. End users wouldn’t see problems immediately, but they would start occurring over time.
“We believe relatively few consumers … are affected,” he said.
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